HomeBusinessExclusive: ECB union says staff losing faith in leadership over inflation, pay

Exclusive: ECB union says staff losing faith in leadership over inflation, pay

  • 40% of ECB staff have little or no confidence
  • Two-thirds say confidence has been damaged
  • 63% were concerned about the ECB’s ability to protect purchasing power

FRANKFURT, January 18 (Reuters) – (This January 17 story has been corrected to restore the omitted words in paragraph 11)

European Central Bank staff are losing confidence in the institution’s leadership after the ECB’s failure to bring inflation under control and pay that lagged behind the price rise, according to a survey by trade union IPSO.

The responses underline that even central banks, primarily responsible for fighting inflation, are not immune to staff dissatisfaction with the soaring cost of living.

The inquiry was organized in the context of a dispute between IPSO, which holds six of the nine seats on the ECB’s Staff Committee, and the central bank’s Governing Council over remuneration and remote working arrangements.

An ECB spokesperson did not directly comment on IPSO’s findings when asked, but pointed to a separate staff survey conducted by the ECB itself last year, which found that 83% of the nearly 3,000 respondents were proud to work for the ECB and that 72% would recommend it.

The results of the IPSO survey, which focused largely on remuneration and remote working arrangements, but also included questions about trust in governance, were emailed to ECB staff on Tuesday, viewed by Reuters .

They showed that two-thirds of the approximately 1,600 respondents said their confidence in Lagarde and the rest of the ECB’s six-member board had been damaged by recent developments such as high inflation and a wage increase that did not match the rise in prices.

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When asked how much confidence they had in Lagarde and the board when it comes to leading and managing the ECB, the central bank for the 20 countries that use the euro, just under half of the respondents answered “moderately” (34 .3%) or “high” (14.6%).

But more than 40% of respondents said they had “little” (28.6%) or “no” (12%) confidence, while 10.5% couldn’t say.

“This is a serious concern for our institution as no one can run an organization properly without the trust of its staff,” the union said in its email.

INFLATION RISE, PAY BATTLES

It was IPSO’s first survey to ask about confidence in top management since Christine Lagarde took office as president of the ECB at the end of 2019.

A similar IPSO survey of ECB staff, conducted just before her predecessor Mario Draghi stepped down, found that 54.5% of 735 respondents rated his presidency as “very good” or “excellent”, while support for his policies was still growing. was higher.

At that time, however, inflation in the eurozone had been low for ten years. The recent decades-long rise in countries around the world has led to a resurgence of battles over pay between workers and the companies and institutions that employ them.

And a majority of respondents in the October 2019 survey also complained about a lack of transparency in recruiting and perceived favoritism under Draghi.

The most recent Bank of England staff surveyalso conducted in 2019, showed that 64% of respondents “had confidence in the leadership of the bank”.

A 2022 US government survey of department and federal agency employees felt that 61% of respondents had “high levels of respect” for their organization’s senior leaders — roughly stable when compared to the previous two years.

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The ECB spokesperson also pointed to internal surveys in 2020-21 that showed that around 80% of respondents were satisfied with the health and safety measures the ECB had put in place in response to the coronavirus pandemic.

The latest IPSO survey found that 63% of staff who responded were concerned about the ECB’s ability to protect their purchasing power after receiving a pay rise of only 4% last year – or about half of the increase from consumer prices.

The ECB has been criticized by politicians, bankers and academics for initially underestimating an increase in the cost of living and then making up for it with large and painful increases in borrowing costs.

Lagarde, who is not an economist and was not a central banker before joining the ECB, colorfully defended her governance at a staff event last month.

“Without them I would be a sad, lonely cowgirl lost somewhere in the pampa of monetary policy,” Lagarde said, according to a Dec. 19 city hall recording viewed by Reuters.

She and her fellow board members have long been concerned about the risk of a possible “wage-price spiral”, with higher wages feeding into prices, which they say would make it more difficult for the ECB to bring inflation back to its target of 2%.

But IPSO said concern is misplaced and workers should not bear the brunt of the current period of inflation.

“The ECB may be preaching lower real wages, but this is not our position as your staff union,” it wrote in its message to ECB staff.

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Edited by Catherine Evans

Our standards: The Thomson Reuters Principles of Trust.

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